Gross Negative Fair Value - GNFV


DEFINITION of 'Gross Negative Fair Value - GNFV'

An assessment of the total fair value of a financial institution's (FI) contracts in which the FI currently has a balance outstanding to the counterparty. In order for the gross negative fair value to represent the maximum amount that would be lost by all counterparties if the FI becomes insolvent, it is assumed that contracts are not netted and that the other party does not have claims on the FI's assets.

BREAKING DOWN 'Gross Negative Fair Value - GNFV'

Along with gross positive fair value, this value can serve as an estimate to the FI's credit-derivative exposure. Carefully keeping track of these figures can contribute to controlling the FI's exposure to derivatives, because solvency issues can quickly emerge in situations where the market turns against the derivative positions held by the FI.

  1. Derivative

    A security with a price that is dependent upon or derived from ...
  2. Fair Value

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  3. Default Risk

    The event in which companies or individuals will be unable to ...
  4. Credit Derivative

    Privately held negotiable bilateral contracts that allow users ...
  5. Insolvency

    When an individual or organization can no longer meet its financial ...
  6. Passive Income

    Earnings an individual derives from a rental property, limited ...
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